Employment Status in the Gig Economy Global 2020 NRF Publication - Australia

What is the state of law on the status of gig workers today?

While less than 1 per cent of the Australian workforce is engaged in the gig economy, it is predicted that this number will grow.

In broad terms, Australian workers fall into two categories: ‘employees’ or ‘independent contractors’. An employee enjoys comprehensive protections, such as a minimum rate of pay, maximum hours of work, leave entitlements and protection on termination of employment. A contractor is not provided with the same entitlements and does not have the right to make the same claims as an employee when the relationship ends.

Australian courts adopt a multi-factorial approach when characterising the relationship of a worker to a business, with no one factor being more determinative than any other factor. The whole relationship is considered and it is a matter of balance. The courts have also expressed the view that the key question is whether or not a worker is carrying out a business of their own (in which case they are an independent contractor) or providing their services exclusively to a third party (in which case they are an employee).

To date, Australian courts have held that the better view is that gig workers are independent contractors, rather than employees but acknowledged that there are ambiguities.

What are the grey areas in the law?

The fundamental challenge for Australian courts is that the two current categories of workers do not easily accommodate the particular circumstances of gig workers.

Although currently characterised as independent contractors, it is difficult to say that an individual gig worker is conducting a business in their own right. Gig workers typically rely on a shared platform or App for the allocation of jobs and the facilitation of payment. These platforms provide specific instructions, set limits on the workers’ relationships with customers and restaurants, and effectively rate their performance. Some gig workers are provided with branded uniforms, tools and other equipment.

While Australian legal academics have suggested that some of these features create a problematic dynamic, their arguments have not yet persuaded the courts.

What legal developments are expected in the future?

Many jurisdictions across Australia have taken steps to deal with the perceived inadequacy of the traditional definitions of ‘employee’ and ‘independent contractor’, exploring various policy and legislative solutions. There have been several State Government inquiries, reflecting a growing community concern with the lack of legal protections afforded to gig workers.

For instance, the Inquiry into the Victorian On-Demand Workforce has published 20 recommendations aimed at better protecting on-demand (or gig) workers. The Victorian Government is currently considering community feedback on the recommendations before publishing its response. Similarly, New South Wales has established a Select Committee on the impact of technological and other changes on the future of work and workers in New South Wales, with hearings scheduled throughout 2020 and early 2021. The Select Committee’s terms of reference include considering the impact of the gig economy in New South Wales. Queensland also undertook an investigation into a possible extension of workers’ compensation coverage to certain gig economy workers. The matter is still under consideration by the Queensland Government, with a Decision Regulatory Impact Statement expected in response to the current consultation process.

At a Commonwealth level, although the Attorney-General instigated an industrial relations reform working group process earlier this year, attended by employers, unions, industry groups and government, the status of gig workers has not featured in these discussions.

More recently, the likelihood of some legislative reform has increased following public and media scrutiny of the conditions of gig workers, because of several instances in the last 12 months of gig workers being seriously injured or killed while working and their perceived vulnerability more generally during COVID-19.